Slide 1: Welcome – Annual Results 2011
WELCOME ANNUAL RESULTS 2011 £
Slide 2: Performance & Operations
PERFORMANCE & OPERATIONS Pierre van Tonder
Slide 3: Introduction
INTRODUCTION • Consumers under pressure: • Household debt high at 76.8% of disposable income • Installment credit extension to private households rose by 5.5% y/y in July 2011 • Unemployment rate 25.7% • Petrol increased 17% since January 2011 • Electricity hikes • Improved sentiment in SA • Stronge
Slide 4: Introduction continued
INTRODUCTION continued • Trading conditions remain difficult in foreign markets • UK particularly impacted: • VAT increased from 17.5% to 20% • Increased NI contributions • Reduced personal benefits • Inflation 4.5% • Average restaurant visits per month now a third of 2008 levels • Impairment of two
Slide 5: Spur Steak Ranches
SPUR STEAK RANCHES • 9.9% turnover growth • Menu price increase of 6% in April 2011 • Existing business growth 7.9% • Opened 11 new restaurants in SA • Relocated eight and revamped 24 restaurants • R25m invested by franchisees • Turnover increased 12 – 15% • 249 restaurants in SA
Slide 6: Spur Steak Ranches continued
SPUR STEAK RANCHES continued • Innovative marketing • Contemporary and humorous elements of SA • Successful launch of breakfast offering • 6% of sales (previously 0.3%) • Spur Family Card loyalty programme • 11.6% of sales from cardholders in June 2011 • 15% increase in average number of repeat visi
Slide 7: Panarottis Pizza Pasta
PANAROTTIS PIZZA PASTA • 4.5% turnover growth • Menu price increase of 6.7% • Opened seven restaurants • New design introduced • 52 restaurants in SA • New COO appointed • Renewed focus on “authentic Italian” offering
Slide 8: John Dory's Fish & Grill
JOHN DORY’S FISH & GRILL • 9.8% turnover growth • Menu price increase of 6.0% • Existing business growth 4.5% • Three new restaurants and one relocated • New menus introduced • Total restaurants now 27
Slide 9: Procurement
PROCUREMENT • Continued growth in basket • Volume increased 20% • Substantial infrastructure investment by Vector • 3 752 032 cases delivered to our restaurants • Continued benefits • Enhanced quality standards • Better pricing benefits franchisee profitability • Health and safety – cold chain • Inc
Slide 10: Manufacturing
MANUFACTURING • Manufacturing operations consolidated into one facility in Cape Town • Johannesburg building sold • Profit on sale R1.205m • Benefit of improved efficiencies to be realised in FY2012 • HACCP compliant facility • Food technologist • Third party manufacturing to reduce idle time
Slide 11: Retail Sauces & Products
RETAIL SAUCES & PRODUCTS • Retail sauce sales up 25.8% • Very low margin – brand building • New Sauce Labels • Spur Ribs – launched into Spar
Slide 12: International – Africa & Mauritius
INTERNATIONAL – Africa & Mauritius • Development delayed • Nigeria – Ikeja Mall • Namibia – Ongwediva • Botswana – Airport Junction • Malawi – Lilongwe • Zambia – Lusaka • Mauritius • Bagatelle • Cascavelle
Slide 13: International – UK and Ireland
INTERNATIONAL – UK and Ireland • Ireland • Harsh economic environment • Lost two franchised restaurants: • Limerick • Newry • Took over Belfast from franchisee • United Kingdom • Opened Gateshead (Newcastle) – performance under expectations – impaired • Wandsworth impaired • Full-time regional head
Slide 14: International – Australia
INTERNATIONAL – Australia • Tough trading conditions • Monitor in-store quality of service and product, and efficiency levels • Marketing individually targeted and tailored to each store • Region now generating cash • Further franchise opportunities in WA
Slide 15: Information Technology
INFORMATION TECHNOLOGY • In-store • Point-of-sale upgrade • Business intelligence • Security • Speed of service • Data warehouse • Digital marketing • Facebook • Twitter • Websites
Slide 16: Environmental Sustainability
ENVIRONMENTAL SUSTAINABILITY • Eco-warriors • http://www.spur.co.za/EcoWarriors/ • User friendly information for consumers – kids focus • Totem magazine • Base-line audits • Establish our franchise company footprint • Guided our policy development (to be implemented in 2012) • Store audit conducted
Slide 17: Environmental Sustainability
ENVIRONMENTAL SUSTAINABILITY • Packaging • Migration from plastic and polystyrene to paper based packaging from sustainable forestation • Used nationally and internationally
Slide 18: Training
TRAINING • College of Excellence • Six month programme • Theory and practical • Placed in-store • THETA accreditation applied for • Job Fund application
Slide 19: Restaurant Base
RESTAURANT BASE South Inter- Franchise brand Africa national Total Spur Steak Ranches 249 31 280 Panarottis Pizza Pasta 52 5 57 John Dory’s Fish & Grill 27 - 27 Total 328 36 364
Slide 20: Financial Performance
FINANCIAL PERFORMANCE Ronel van Dijk
Slide 21: Franchise – Spur SA
FRANCHISE – SPUR SA R’000 2011 2010 % change Revenue 137 004 124 411 10.1 Operating profit 118 712 107 339 10.6 Margin (%) 86.6 86.3 • Focus on operational standards • Increase in franchise turnover while costs contained
Slide 22: Franchise – Panarottis SA
FRANCHISE – PANAROTTIS SA R’000 2011 2010 % change Revenue 11 526 10 751 7.2 Operating profit 6 837 6 560 4.2 Margin (%) 59.3 61.0 • New COO – hand over costs • Increased investment in marketing
Slide 23: Franchise – John Dory's
FRANCHISE – JOHN DORY’S R’000 2011 2010 % change Revenue 9 782 8 847 10.6 Operating profit 4 543 4 567 (0.5) Margin (%) 46.4 51.6 • Increased investment in human capital • Consulting fees for new menu development
Slide 24: Wholesale and Distribution
WHOLESALE AND DISTRIBUTION R’000 2011 2010 % change Revenue 109 043 94 008 16.0 Operating profit 49 633 44 714 11.0 Exceptional items: Manufacturing facility relocation, revamp & retrenchments 951 - Adjusted operating profit 50 584 44 714 13.1 Adjusted margin (%) 46.4 47.6 • Reduction in margin due
Slide 25: Corporate Services & Other SA
CORPORATE SERVICES & OTHER SA R’000 2011 2010 % change Revenue 19 749 17 554 12.5 Operating costs (34 918) (28 911) (20.8) Exceptional items: 525 (2 658) Capital profit on sale of Gauteng building (1 205) - Gauteng office and Decor relocation 182 - Employee benefits 6 409 1 682 Interest (4 861) (4 3
Slide 26: United Kingdom
UNITED KINGDOM R’000 2011 2010 % change Revenue 65 936 56 080 17.6 Operating loss (27 688) (12 396) (123.4) Exceptional items: 24 917 11 825 Bad debt write off - 1 075 New restaurants start up losses 5 174 - Yellowstone trading losses 1 261 2 756 Restaurant impairments 13 534 7 994 Goodwill impairme
Slide 27: United Kingdom continued
UNITED KINGDOM continued R’000 2011 2010 % change Cash flow (loss)/profit (882) 3 270 (127.0) Exceptional items: 2 818 1 233 New restaurants start up losses 1 914 - Yellowstone trading losses 904 1 233 Adjusted cash flow profit 1 936 4 503 (57.0) • Additional costs incurred due to full time employee
Slide 28: Australia
AUSTRALIA R’000 2011 2010 % change Revenue 43 464 30 013 44.8 Operating loss (1 279) (1 807) 29.2 Exceptional items: 1 095 (713) New restaurants start up losses 1 095 - Payroll refund - (713) Adjusted operating loss (184) (2 520) 92.7 Cash flow profit/(loss) 1 480 (978) 251.3 Exceptional item: 376 -
Slide 29: International Other & Corporate Services
INTERNATIONAL OTHER & CORPORATE SERVICES R’000 2011 2010 % change International other Revenue 6 892 6 360 8.4 Operating profit 5 226 5 287 (1.2) Margin (%) 75.8 83.1 International Corporate Services Operating costs (4 235) (2 424) (74.7) Exceptional items: Foreign exchange loss/(gain) 794 (1 555) Ad
Slide 30: Comparable Profit Before Taxation
COMPARABLE PROFIT BEFORE TAXATION R’000 2011 2010 % change Profit before tax 116 830 122 929 (5.0) Manu. & Distribution exceptional items 951 - Corporate services & other exceptional items (4 679) (4 340) UK exceptional items 24 917 11 825 Australia exceptional items 1 095 (713) Employee benefits ch
Slide 31: Financial Position - Assets
FINANCIAL POSITION - Assets R’000 2011 2010 Property, plant & equipment 70 387 75 184 Intangible assets & goodwill 281 477 279 609 Investments & loans 5 857 14 533 Deferred tax 11 967 11 128 Leasing rights 1 798 2 155 Inventory 5 621 6 389 Taxation receivable 4 410 3 600 Trade & other receivables 58
Slide 32: Financial Position – Equity & Liabilities
FINANCIAL POSITION– Equity & Liabilities R’000 2011 2010 Equity 408 236 403 295 Long-term loans 2 923 7 181 Operating lease liability 6 531 3 328 Other non-current liabilities 3 182 - Deferred tax 60 454 54 060 Bank overdrafts 2 256 3 596 Taxation 6 622 4 832 Trade & other payables 65 147 53 969 Sha
Slide 33: Cash Utilisation
CASH UTILISATION R’000 2011 2010 Cash from operations 144 655 134 474 Net interest received 4 861 4 948 149 516 139 422 Distributions paid (54 785) (80 708) Taxation paid (41 149) (49 528) Working capital changes 2 631 3 394 Investment in leasehold improvements (14 779) (8 791) Purchase of treasury
Slide 34: Outlook for 2012
OUTLOOK FOR 2012 Pierre van Tonder
Slide 35: Outlook for 2012
OUTLOOK FOR 2012 • Consumers to remain under pressure • Increased investment in value-added marketing campaigns with suppliers • Build on momentum created in the breakfast market • Brand loyalty to be entrenched through aggressive marketing of the Spur Family Card • Addressing the performance of the
Slide 36: Outlook for 2012 continued
OUTLOOK FOR 2012 continued • Continued restaurant growth in SA • 11 Spur Steak Ranches • Two Panarottis Pizza Pasta • Two John Dory’s Fish & Grill • Selective international openings • No new group-owned restaurants planned in UK or Australia • Malawi, Tanzania, Namibia, Nigeria and Mauritius
Slide 37: Questions?
QUESTIONS? Thank you S